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Some practical tips in response to the Rocky Hill decision

A number of clients have asked us about the implications of the recent NSW Land and Environment Court decision in Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7, (where Gloucester Resources Limited’s (GRL) appeal against the Planning Assessment Commission’s refusal of the Rocky Hill Coal Project was lost).

In the table below we have extracted some key commentary by the Court, against which we’ve indicated how we think these comments should alter the approach taken by proponents of mining projects seeking development consent.

Decision

Consequences for future developments

Indirect emissions to be assessed

Clause 14(2) of the Mining SEPP requires a consent authority to consider the 'downstream emissions' of a proposed mining, petroleum production or extractive industry development.

Scope 3 (or indirect greenhouse gas (GHG) emissions generated by burning of the coal mined by GRL) were held to fall within the term 'downstream emissions' and must be taken into account in assessing project environmental impacts.

Proponents should ensure their development applications fully assess the full range of GHG emissions likely to be generated by their Project, both directly and indirectly.

Scope 3 emissions must be explicitly addressed and accounted for within each mining environmental assessment.

More justification required for appropriateness of proposals for GHG generating mining developments

The Court drew heavily upon the evidence of Professor Will Steffen, who applied the carbon budget model in assessing climate change impacts. In order to achieve the target of restricting warming to 2º Celsius, Professor Steffen said that net zero emissions must be reached within 21-22 years, requiring a rapid phase out of fossil fuel combustion.

While the Professor suggested only existing fossil fuel developments should be allowed to continue, before being rapidly phased out, the Court decided that the better approach is to evaluate the merits of each particular fossil fuel development including consideration of:

the GHG emissions of the development and the likely contribution to climate change in absolute terms ie preferring smaller fossil fuel developments with lower emissions over larger projects; and

other environmental, social and economic impacts of the development, i.e. preferring better located developments with fewer adverse impacts.

'carbon budget' methodology, including a comparison of the emissions to be produced by the development with other fossil fuel developments, and how the proposal is better placed to minimise emissions; and

particular site-based or environmental benefits of the proposal.

The weight given by the Court to Professor Steffen’s climate change evidence indicates that it is prudent to engage highly skilled and well-credentialed experts in the respective fields of climate change and social impact.

Mitigation measures must be concrete proposals, not an afterthought

To counteract the carbon budget evidence presented by Professor Steffen, GRL argued that the climate change impacts of the Project could be mitigated if enough carbon could be removed from the atmosphere to counteract the emissions of the Project by others using carbon capture technology, carbon sinks or by reducing emissions created from other sources.

However the Court found this suggestion to be speculative and hypothetical, as there was no evidence presented by GRL as to any specific proposal to offset the emissions of the Project.

Proponents should prepare well-defined and concrete proposals as to how carbon offsets or sinks will be achieved to address the direct and indirect GHG emissions likely to be generated by their project.

Economic analysis in support of proposals should be thoroughly peer reviewed

direct benefits of the royalties and company income tax likely to be paid in respect of the Project; and

indirect benefits from the creation of jobs and to local suppliers.

The Court also held that the indirect costs of the Project would be greater than GRL contended, including because many environmental and social costs of the Project had not been quantified or addressed, and consideration of indirect costs to other industries like agriculture and tourism were limited.

Any economic analysis prepared in support of fossil fuel and other mining applications should be peer reviewed, to ensure it is rigorous, compelling and fulsome. These reports are crucial to demonstrate that the benefits of the proposed project outweigh adverse environmental and climate change impacts.

Social impacts of proposed mining developments should be fully addressed

The Court extensively considered the multifaceted social impacts of the Project. Residents’ way of life, the cohesion and composition of the community, health and wellbeing, and personal property rights were considered. Ultimately the Court felt the impacts of the Project outweighed any social benefits, which were mainly restricted to short term boosts to the local economy and employment.

a further social impact would be caused by the distributive injustice/inequity of the Project, in that the benefits of the mine would be experienced by a select few for a limited period of time, while the detriments would be ongoing and would not necessarily be experienced by those who benefit;

the suggested mitigation strategies not only failed to address key social impacts but may exacerbate those impacts. Specifically, the proposed 'amenity walls' were argued to worsen the visual impact of the mine and the changed sense of place; and

found that social impacts may be perceived as well as actual. For example, although Project particulate, noise and light pollution levels would be compliant with the applicable regulatory criteria, these impacts would still be perceptible to local residents. Impacts would cause high levels of concern, stress and anxiety, with consequent mental and physical health effects. This was held to be sufficient to establish an extreme social impact, justifying refusal of the mine in the context of the other identified impacts.

Be mindful in preparing social impact assessments about the enduring implications of the project on local communities including after the project’s operations conclude - this includes demographic changes to local communities and their ability to remain sustainable after operations finish.

Risk of community groups seeking to be joined in litigation is increased when climate change and social impacts have not been adequately addressed

The Court granted an application made by a community group, Groundswell Gloucester, to be joined to the proceedings. In allowing the joinder, the Court referred to section 8.15(2) of the Environmental Planning and Assessment Act 1979, finding that the arguments made by Groundswell satisfied the tests, in that:

Groundswell sought to raise two new issues before the Court, relating to the climate change and social impacts of the Project. The Court agreed that:

the climate change issue would not be sufficiently addressed by the Department of Planning & Environment. Although climate change was identified in the Director-General’s environmental assessment requirements, this was not one of the reasons for objecting to the Project;

the social impact of the Project would not be properly considered in the absence of Groundswell’s evidence, which sought to bring evidence from an anthropologist regarding the social impact issues; and

it was in the public interest that the community be given the right to be heard, considering the number of submissions made (2,308) and the significant public interest in the Project.

Although applicants cannot dictate matters which a consent authority will place in contention in an appeal, they should ensure that their applications fully respond to concerns of the community, climate change and social impacts.

Briefing consultants with previous experience giving expert evidence in Court will help equip proponents for an appeal, should that become necessary, either because consent is refused or because the validity of a consent is subsequently challenged in Court.

Early and full engagement with local communities will also assist in reducing the risk of legal challenge.

For further detail on the decision, Corrs’ In Brief article is linked here.

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